Insurance in the internet of things: the Future Stigma of Data

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In May, Ana Bradley joined my consultancy as a Partner and one of the first clients we worked on together was Imago TechMedia. We helped them plan an event for the insurance sector around the internet of things in a half day workshop. The insurance sector is one I’d recently been looking at anyway for a piece of strategy work I’m doing with the BBC R&D North Lab in MediaCityUK. In light of Cory’s post tonight  though I thought I’d share some quick thoughts on the matter.

For the past 4 years, insurance companies have been using connected hardware to offer flexible and dynamically generated premiums in the car industry.

  • In 2010, MyKey was a feature on all new Ford cars which allowed parents to lend their car to their teenager and set parameters of usage.
  • In Germany, all new cars have “black boxes” by default since a government ruling supported this in 2012.
  • These days, companies like Ingenie set up the box on any car for the young driver (17-25 year olds) in your household and charge you premiums according to their driving behaviour

Now they are looking beyond cars and into the world of healthcare insurance (after all they’d been tracking your gym attendance) and what better consumer products to exploit than the emerging bubble of wearables?

This sounds good in principle: if you’re good, and you exercise you premium will be low. But what if you’re bad for just one week because you got dumped by a significant other? You spend less time in the gym and so are automatically penalised, even if you’re doing ok overall.

What if you’re really ill? Then the insurance company might offer you a plethora of connected devices, all in the name of making you pay less while they (via the product company) collect more and more data. If we’ve got issues with the NHS holding our data, well I’m not sure we’d trust insurance providers, after all private companies who own the devices can do whatever they like with the data. Remember that back in 2011, TomTom sold its satnav data to the Dutch police who then used it to set speeding traps and retro-actively send speeding tickets. 

So people start to panic and say “No I don’t want to be traced”. So they are charged more.

And this is where a new divide occurs: a new class system determined by data. The poor are tracked and traced while the rich can afford to pay more for their premiums and for anonymity by extension. This also means wearable companies will be tainted by that industry and will come to mean “i’m too poor to pay or ill for expensive insurance so I wear a connected device”.

Might sound a little Adam Curtis, but that future is what worries me about insurance companies.

Crowdfunding a hardware project: Tips & Tricks

I’ve been getting a lot of requests for coffees from startups who want to hear about crowd funding and the lessons I learnt running a campaign for the Good Night Lamp back in early 2013. I thought I’d capture what I’d say to them here and share it to a wider audience:)

1. What are you?

Before you take this on, have a think about what your product is. Is it a project? Is it a company? Is it a way to get PR for yourself/your consultancy? Is it a way to test the appetite for a corporate R&D idea?
Being self-aware is important in life and in business because it will help you deal with whatever outcome your campaign might have.

  • If you’re a project there might be a lot of value in aiming to do a very small run of the product, say 50-100 and raising money for that. Most successful campaigns sit at the $15 000 mark which is not a lot at all in the world of hardware. So think about what you could do with very small amounts of money.
  • If you’re a company, then see the next bull-it point. You really want to start building up the company pre-campaign.
  • If you’re trying to get PR, well good luck. Journalists are bombarded with requests to write about crowd-funding projects in ways they weren’t a year and a half ago. You may find it easier to reach out to small specialised publications but the audience numbers vary accordingly.
  • If you’re testing a corporate R&D idea, be clever about how you market yourself when smaller teams are trying to raise money on the same site. You’re probably not so fussed about the money, but they are and whatever you go after skews the market for everyone else if it’s too low. Try raising the amount of money that would cover your salary for eg. Also be truthful about your allegiances, it’s ok for you to be there, but let yourself known. A good example of how NOT to do it would be Samsung’s massively overthought lamp which only mentions Samsung in the smallest of print.

2. Talk to investors before.

Running a crowdfunding campaign turns a massive countdown timer on. Once you publish an idea in the public arena, you have a year to protect or patent it (this varies on what you’re building, but look it up) so you want to develop it as far as you can without crowdfunding and with external help: investors. Most early-stage investors (friends and family) will be happy helping you out with small amounts that will get you to the pre-industrialisation stage or past the rendering & prototyping stage. Once you go to crowd-funding, they will stick around and become your allies on what is often a long road to success. Meeting with investors pre-campaign is an important way to let them know you’re serious about the role of crowdfunding as a way to test the appetite for your product. Running a very successful campaign also increases your valuation (if you don’t know what that means go buy “Venture Deals” by Brad Feld straight away). So put a shortlist together and go meet the Partners (try not to waste time with Associates) before you go live and ask them for feedback. They might not want to invest early on but will be good to you if they like the idea. Be aware that making a project public also means potential competitors can learn from your success or failure. You are exposing yourself and your idea to the world with little protection against large corporations who might be looking at your product space. You are their guinea pigs. When LIFX came out with their wifi lightbulb, Philips came out with their within a few weeks. Not a coincidence.

You want to have very clear agreements with everyone working with you (in writing) and budgets planned. If you’re massively successful you need to know in advance how you’ll spend the money, what the timelines are for ordering parts, assembly partners, etc. These are not easy to find so you might as well do the work up front before you have hundreds to thousands of demanding customers waiting after your product.

3. Prepare yourself

The most crucial element of crowdfunding is email. You’ll be glued to your inbox for the duration of your campaign. I used to get up in the middle of the night to make sure I responded to West Coast requests in time for them to see it during their day. An important part of the crowdfunding audience is in America, so you want to cater to them a little. If your project page isn’t clear enough for a non-tech person to understand, you’ll get emails. If it doesn’t explain every single aspect of yoru project, you’ll get emails. You’ll get emails from companies who have chosen crowd-funding projects as a market (marketing, warehousing, manufacturers, etc). Depending on what kind of person you are, you may want to give this task to someone who has experience managing communities online. It’s not a particularly forgiving activity, but you’ll get real feedback on what you’ve put out, both good and bad.

4. Make it easy for the press

If you happen to showcase your product somewhere (we had a booth at CES on campaign launch) while running the campaign, you might meet some journalists who might want to write about what you’re doing. Make it easy for them by having a press link, with a dropbox link to a press release (in .doc format and pdf) and some high resolution (300 dpu) images of your product with a white background. This covers 90% of what journalists need, whether it’s going online or in print. The remaining 10% is interviews you may need to do either online or face to face and those are generally fun. They’re also a good way to practice your elevator pitch which you will learn to repeat like a parrot on crack for months (or years in my case).

5. Money isn’t the problem

Out of all the things your product needs to come to life, money is only one of them. The industry is still quite young and finding talent is difficult. Retailers are starting to get it (John Lewis launched an incubator recently) but technology investors in the UK are still only really interested in investing in businesses already generating revenue. If you’re in the US, you’re in luck (as usual) in that respect but a very limited number of funds are investing in this space. The general public is starting to see interesting connected products hit their Christmas wish lists, but if your product retails for more than £100, you might be in the luxury goods market for now. Connectivity is still expensive and pricing a dark art (usually retail price of RRP is 4 times what it costs you to make the product).

It’s difficult but not impossible to be successful. All you have to do is pace yourself and not expect your campaign to solve all your problems.
Good luck.

Pantry: better than the internet fridge

It’s been a couple of very busy day. I gave the keynote at Thingscon and it gave me an opportunity to actually think about the internet fridge, that idea which doesn’t seem to want to die. So I thought I’d put my designer hat on (yes it’s a little dusty but hey ho) and think about what I wanted out of a smart fridge. I realised that the actors who knows the most about what I have bought is both the supermarket and ME. Not the fridge. The fridge is a better icebox. Some people put things in fridges that I don’t (eggs, tomatoes & onions are good examples). I should still be able to make this whole thing smart. So I decided maybe the smart fridge is just a better way to keep track of things at the point of purchase (NFC in self-service checkout points anyone) or through, you know, the BUYER.

So here’s Pantry (i’m squatting this URL for now, no intention of giving myself more work than I aleady have ;)), an app for you and your food.

It’s simple. It’s an app where you can add something to your pantry (maybe auto-complete from your favorite supermarket’s database) and it starts to count down the time you’ve owned it. You either delete it or you add it to a shopping list which could turn into a digital shopping order if you wanted to. It doesn’t matter if the food is in your fridge or in your pantry but the app can show you what should probably be in the fridge. That’s it.

Just by seeing the number of days you’ve owned something is really useful, and also probably helps keep a saner kitchen. It also probably helps you avoid buying more cinnammon sticks which I often do.

There are favorites because of course, some things have a high churn like milk, toilet paper and in my case orange juice, but you can just add favorites as you go.

So there, sometimes really, the internet of things is about making the world connect to you as a user in a more useful way. I’d love to spend more time on Pantry, maybe one day, right now I’m worrying about lamps.

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A litmus test for the internet of things

It’s taken me about 2 months to work out how to show the differences between products that companies say are iot and those that possibly aren’t. I suspect I actually need to explain it but I’d rather have a good conversation on Twitter about it so I can tweak things accordingly.

For clarity, a lock means it’s proprietary.
No lock means it’s open source.
Absence of means its not provided by the company directly.

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Introducing #iotangels

There are many reasons why the UK is a great space for internet of things startups: access to the creative industries, manufacturing, advertising, technologists. Funding isn’t one of them sadly as I highlighed in a talk at a Policy Connect event last week at the Design Museum. Which is why I’ll be starting an angel fund specifically focused on supporting internet of things startups.

If you’d like to help, please join us for dinner.

Gonzo Products: how crowdfunding is changing the internet of things

I gave a talk about this at Future Everything last week. As usual the shape of the talk only really came together an hour before (this drives conference organisers nuts) and I thought I’d write it up. If you come to IOT Forum in Cambridge or Thingscon in Berlin you can ask me about this some more.

The dust has settled after an eventful start to 2014 (CES was full of #iot, Nest’s acquisition, SXSW and last week’s OR acquisition) and it’s time for the Milan furniture Fair (which I used to go to when I lived there and in the Tinker years). You couldn’t find an event less in touch with what’s happening in the world of connected products: chairs, ceramics, tables, lampshades. Design in those circles is as artform catering to a rich clientele where the highest form of self-aggrandising for a designer is to complain about technologies they weren’t involved in. None of those products are connected and most of them are designed by professionals with no interest in the internet as a transformative space or set of technologies and principles. It’s a shame because whatever conversation could have happened between product designers & technologists has now been made redundant. In 2014, we are experiencing a new era of product development, what I’m now calling Gonzo Products.

What is a Gonzo product?

- Born on a crowdfunding platform The team of people working on the product exists solely for the purposes of catering to the campaign’s needs, not necessarily to create a bigger business or more products.

- Raising the money it needs to look successful, not the money it needs to make it. Lots of smart products on crowdfunding platforms are trying to look successful to investors first, not necessarily raise the money needed to make the product viable. Any product looking to raise less than £50K to manufacture a product from scratch is basically either very well supported with existing partners or catering to a completely different audience: investors. This is counter-intuitive as crowdfunding was initially developed to help support the early stages of a project. In this case Gonzo Product teams are using crowdfunding as a marketing, market research & finally market validation tool. It’s easier to find angel funding if you’ve got a successful campaign than if you don’t which means crowdfunding is a new way for investors to manage their deal flow for hardware startups.

- Not businesses, projects. Gonzo Product teams will potentially only ever work together to achieve one product only and disband after (see Air Quality Egg).

- Selling the #iot dream, not the reality. Most very high profile Gonzo Products primarily show what the internet of things can be and should be. Selling the dream, not the realities. This is problematic as making a product people can buy, that can be supported and is sold in John Lewis should be the real criteria for success when it comes to #iot. Most gonzo products will be closer to design fiction than they will be to commercial reality and this might influence investors, journalists and other entrepreneurs in the same space but more importantly consumers.

Is this good or bad? I don’t think it’s either. It’s a new product and business space. How much power will Gonzo Products have on the way in which the internet of things develops this year? Plenty. But people like me who are keen to make real businesses and products just have to hold on and learn from them.

A map of UK maker spaces

As part of my work with the Connected Digital Economy Catapult, I’ve been putting together a map of hacker / maker spaces in the UK. These spaces are really important in linking a person with a project idea to a community with resources. Maker spaces are also more than physical resources, they can be a platform for someone to meet like minded people in their area, find co-founders, find the impetus to work on a project that’s been sitting on the side of the kitchen table, or even find the necessary resources to start a business. I’ve only mapped out the physical spaces for now (mostly for the purposes of the report I’m writing) but if you want the complete list of people who also just meet and hang out have a look at the Hacker Space list.